Oakville Chamber warns of increased Employment Insurance (EI) premiums
The Employment Insurance (EI) program is an essential part of Canada’s social safety net. It aims to provide temporary financial support to people who lose their jobs while they look for work. The program has not been fully reviewed in over two decades, and it is important that the EI system be modernized and reflect labor market and workforce needs work today.
To that end, the Chamber welcomes the federal government’s review of the program to ensure that services are resilient, accessible, adequate and financially sustainable. Businesses are still recovering from the post-COVID crisis and are facing a host of challenges, including labor shortages, record inflation and supply chain disruptions. We warn the government that now is not the time to achieve these goals by increasing EI premiums.
The employment insurance program has been tested during the pandemic, and the extraordinary measures that have been taken have been very costly. According to the 2022 actuarial report on the EI premium rate, the COVID-related measures will cause the EI operating account to a projected cumulative deficit of $33.9 billion by the end of 2022.
The 2022 federal budget suggests that rates could increase by 15 cents (in 5-cent increments) over the next three years (2023-2025) to return to equilibrium.
The business world has endured COVID and the pandemic has had a profound impact on the ability of businesses to operate. Employers should not have to bear an additional burden of government debt related to the employment insurance pandemic due to the increase in premiums. We believe economic recovery requires government programs and policies focused on growth and sustainability.
As the government finalizes its consultations on the reform of the employment insurance program, we must take into account the economic challenges that businesses and employers are facing today due to factors beyond their control. Employers who pay 58% of EI should not be burdened with a premium increase.
On behalf of the members of our chamber, we encourage the federal government to consider employment insurance program solutions that do not rely solely on increasing premiums.
An Oakville resident and government relations and communications professional, Faye Lyons is Vice President, Policy and Government Relations for the Oakville Chamber of Commerce.